The failure rate is probably worse because people don't know how to handle them properly. What if you can't add an internal drive because you're on a laptop or something else that doesn't support expansion? What if you backup to more than 1 system? What if the backup needs to serve more than a single pc or be used on more than one? An external can handle these.

An internal drive is typically cheaper and probably idiot-proofs itself by default than a external from lack of exposure the the owner, but with the disadvantage of losing it's portability.

I think it is the opposite: bit rot is the reason to not to choose e.g. DVD-R as the long-time storage media. Even the article you linked to specifically mentions optical media (CD-R, DVD-R, BD-R) experiencing data decay. Hard disk drives are not mentioned as being a specific target of bit rot, but naturally they can break down (either due to an accident, or long-time use).

As I mentioned before, quite a few of my old CD-R discs are unreadable nowadays, even though they have been stored properly in the dark, dry place.

USB3 hard drive. Choose size, enjoy.

Always potential for additions.